Small business sales up but SME outlook still poor: ANZ survey
Small business sales have increased in the three months to October by 3.5%, but conditions are poor in states without resource-based economies and the overall economic environment remains challenging for SMES, ANZ's latest survey has found.
The bank's Small Business Sales Trend found that while sales increased by 3.6%, and were up 8.3% year on year, this figure was actually given an artificial boost by the football grand finals. The news follows similar gloomy tidings from ACCI's small business survey last week.
Sales growth was especially strong in Western Australia and the Northern Territory, up by 7.1% and 5.5% year on year, respectively. Sales were slightly lower in Queensland, up just 2.9% as it faces some economic troubles.
In a statement, ANZ head of Australian economics Justin Fabo said non-food retailing continues to underperform compared to food and service sales, although that could be due to intense price competition.
"Small business sales growth in the resource-rich states of WA and NT has remained a standout," he said. "We are closely watching how events are unfolding in WA given the importance of mining to that state's economy."
Fabo also pointed out that small business sales in New South Wales are beginning to improve, with a tightening gap between sales in metropolitan and rural areas.
The index shows retail sales grew by 4.8% in the month of October, while non-retail sales grew by 10.7%. In the quarter, retail grew by 2.4% while non-retail grew by 4.3%.
Growth in metro and regional areas were on pair, 3.5% and 3.6% respectively in the quarter, while the gap widened in the sole month of October. Metro sales were at 9.2%, while rural areas were at 6.8%.
There is also a worrying gap between the resource-rich states and others. While sales in Western Australia and Northern Territory are 7.1% and 5.5%, sales in Victoria were just 3% and just 2.4% in South Australia.
Broken down into smaller categories, the results also represent a gap between sectors.
Appliances and electrical sales fell 1.1% in the quarter, while clothing and fashion was down 0.3%, homewares and furniture were up just 0.4%, while "other retail" was at 3.7%. Other food outlets rose by 5.4%.
However, sales were more encouraging during the sole month of October. Appliances and electrical were up 4.7%, and clothing and fashion was up 1.1%.
ANZ general manager of small business Nick Reade said states disconnected from mining continue to be challenged, with growth overall quite soft.
"Looking ahead, companies will be under pressure to adapt to these conditions and remain competitive."
"Those exposed to interest rate sensitive parts of the economy, including housing and durables consumption, are likely to see some benefit from the reduction in interest rates over the past year."
"Nevertheless, we expect only a gradual pick-up in these sectors during 2013."